A Japanese company called SoftBank intends to purchase a 70 percent stake of wireless provider Sprint Nextel.

The $20.1 billion deal consists of $8 billion to buy new Sprint stock at about $5.25 per share as well as $12.1 billion to buy stock from existing investors at $7.30 per share, according to a New York Times article. The Times also reports that the deal is still subject to approval by Sprint shareholders and regulators, but it is expected to be complete in mid-2013.

USA Today reports that the new company will be called New Sprint, and current Sprint shareholders will still own 30 percent of it. At least three current board members will serve on New Sprint’s 10-member board, and current CEO Dan Hesse will remain in charge.

Sprint Nextel is the third-largest wireless carrier in the United States behind Verizon Wireless and AT&T. It has 56 million subscribers, about half as many as either of the two leaders individually. Combined with SoftBank’s Japanese customer base, New Sprint will have more than 96 million subscribers, according to Forbes.

The Wall Street Journal said the deal was the “biggest-ever overseas acquisition by a Japanese company.”

Analysts interviewed by Forbes and USA Today expressed optimism about the merger, calling it a good move for both SoftBank and Sprint Nextel.

“Sprint is clearly undervalued,” Roger Entner of Recon Analytics told USA Today. “The spectrum that Sprint owns is worth more than the market (capitalization of the company),” he said, referring to the wireless frequencies that Sprint controls.

“We’d expect that Sprint, with a more robust financing position and SoftBank’s influence, to become a more robust competitor in the US market,” Barclays analyst James Ratcliffe told Forbes. “We’d expect the deal to increase the competitiveness of the US wireless market in the longer term.”

Even though New Sprint will still be smaller than either AT&T or Verizon, the acquisition will bolster the company’s position against fourth-largest wireless provider T-Mobile USA, which is in the process of acquiring fifth-largest MetroPCS.